Patience has paid off handsomely for investors in 2021. It’s been over nine months since the benchmark S&P 500 underwent even a 5% correction. Panning out a bit further, the widely followed index has doubled since hitting its bear-market low on March 23, 2020. Yet…
even with the stock market mowing down record highs on a regular basis this year, Wall Street still sees value in a number of growth stocks. Based on the highest price target issued by a Wall Street analyst or investment bank, the following four growth stocks could deliver gains ranging from 116% to as much as 247%
Tesla Motors: Implied upside of 134%
Few stocks are as polarizing on Wall Street, from the perspective of price targets, than electric vehicle (EV) company Tesla Motors (NASDAQ:TSLA). Whereas one analyst foresees approximately 90% downside in shares of the company, another believes Tesla could “motor” its way to $1,591 a share. This would represent 134% upside from where the company ended this past week.
On one hand, Tesla has clear-cut advantages that are driving it forward. For instance, its battery technology offers more capacity, range, and power than competing EV manufacturers. Tesla has also built itself from the ground up to mass production. Based on its second-quarter deliveries of 201,250, the company looks to be on its way to topping 1 million annual deliveries by as soon as next year. Finally, don’t overlook that Tesla has visionary Elon Musk as its CEO.
On the other hand, it’s unlikely that Tesla will be able to hang onto its competitive edges over the long run, with auto stocks like Ford Motor Company and General Motors respectively investing $30 billion and $35 billion through mid-decade in EVs and related technology. Both companies plan to respectively launch 30 new EVs globally by 2025.
Perhaps the biggest concern is that Tesla hadn’t generated a true operating profit until the latest quarter. Though it’s been profitable for more than a year, the company had relied on selling renewable energy credits and one-time asset sales (e.g., Bitcoin) to generate a profit. If Tesla is ever going to hit $1,591 a share, its EV sales, not one-time benefits, will have to do the talking.
Green Thumb Industries: Implied upside of 116%
Wall Street also sees U.S. marijuana stocks budding over the coming year. In particular, one Wall Street analyst believes multistate operator (MSO) Green Thumb Industries (OTC:GTBIF) can rally to north of $61 a share, which would equate to 116% implied upside.
The great thing for U.S. MSOs is that they don’t need federal reform to thrive. We’ve watched 36 states legalize cannabis in some capacity, which is providing more than enough of a growth opportunity for MSOs and ancillary players to succeed. By mid-decade, New Frontier Data is predicting that the U.S. weed industry could bring in $41.5 billion in annual sales.
Green Thumb currently has 62 operating dispensaries, with 111 total retail licenses in its back pocket and a presence in 14 states. This is a company that’s been picky about its expansion and has generally focused on either high-dollar states or markets protected by limited license issuance. In Illinois, for instance, the number of retail licenses issued, in total and to a single business, is capped. This should give Green Thumb a good opportunity to gobble up market share in a billion-dollar market.
But the best aspect of Green Thumb is…
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